News: The new rules of taxation on scientific research to be introduced in Hong Kong

The Internal Revenue Department of Hong Kong reported on the implementation of new rules for obtaining taxes from those types of scientific activities that relate to development, innovation and hi-tech. The planned introduction of some states is a planned implementation of a previously adopted program by the leadership of the region.

The text of the Department on new tax rates states that the practice of accelerated tax deduction has introduced. In other words, taxpayers may require an increase in tax deductions for research and development expenses incurred since April 1, 2018, or after this date, in respect of relevant research and development.

The Department's notes explain that the taxpayer may be eligible for a 100 per cent tax deduction or an enhanced tax deduction for research and development costs. This practice will allow development companies to apply for reimbursement of previously overpaid taxes for the period from April 2018 to April 2019.

An equally important factor in the maintenance of new rules will be the creation of a unified service for calculating the returned funds for overpaid taxes. Hong Kong's IRD plans to introduce a system of compensation and a partial refund of those funds that were either taxed for the specified period or are goods, services, patents or trademarks that fall under the category of multi-purpose products. However, the agency has not yet reported and does not comment on the specific date or launch of the pilot project.

Law and Trust International company provides an opportunity to register a company in Hong Kong. About the cost of registration and its features, please contact our lawyers.